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Author Question: In the long run, a competitive firm has a marginal product of labor, MPL = L-1. The output price is ... (Read 27 times)

lak

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on: Jul 1, 2018
In the long run, a competitive firm has a marginal product of labor, MPL = L-1. The output price is 20 per unit and the wage is 7.25 per hour. The long-run labor demand curve for the firm is
 
  A) 20L-0.05.
  B) 7.25L-0.05.
  C) 20L-1.
  D) 7.25L-1.

Question 2

Because of market power, wages are higher under monopsony than under competitive conditions.
 
  Indicate whether the statement is true or false


Pamela.irrgang@yahoo.com

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Reply #1 on: Jul 1, 2018
Answer to Question 1

C

Answer to Question 2

False. Because of market power, the monopsonist pays a lower wage than is paid in a competitive market.


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